Navigating Our Financial Times
Nov 2, 2026 · 48 min · 18 segments
Despite a number of recent economic shocks, such as rising oil prices, supply disruptions, trade deficits and uncertainty surrounding the artificial intelligence landscape, mid-October marked four…
Spencer JakabGuestLinda O'BryonHostNicole CoxHostSo let's begin with the topic that's on the mind of everyone these days, and that's the midterms and how elections affect stock and bond markets.
You've pointed out that the fourth quarter of a midterm election year has been among the best times to own the Standard & Poor's 500.
What are the likely scenarios during this midterm quarter, and what will be the biggest factors driving the markets?
The thing that tends to drive the stock market during this period, during the fourth quarter of a midterm election year is believed to be is that you finally get some certainty.
There's a lot of anxiety about maybe the president's party losing a lot of seats, which is pretty typical.
But I think rather than also all the political calculations people look at, What if this Democrat House or Democrat Senate or whatever, or split government, you know, people, there's this kind of cliche that, you know, the split government is good because there's this gridlock and gridlock is good because then the government can't do anything.
That might not necessarily be the best explanation because the stock market tends to actually get quite nervous in the third quarter of a midterm election year.
And once the outcome more or less is known, then they get much more relaxed and it regains some of that.
I mean, the market is within spitting distance of an all-time high as we speak.
And what about sectors? Are there certain sectors that will do better in that kind of split, Congress, that you're talking about? Yeah.
If you look at who's elected president or what parties in power, people will make certain bets like Goldman Sachs or Bank of America or whoever.
All of a sudden, their research will come out with a Trump portfolio or this portfolio or that portfolio.
You look, though, at what sectors did well under, let's say, a certain president who was known to be friendly to Industry X, not friendly to Industry Y.
And it's very often the exact opposite, just in the way that people were nervous and now the market is kind of relaxing a bit.
So let's begin with the topic that's on the mind of everyone these days, and that's the midterms and how elections affect stock and bond markets.
You've pointed out that the fourth quarter of a midterm election year has been among the best times to own the Standard & Poor's 500.
What are the likely scenarios during this midterm quarter, and what will be the biggest factors driving the markets?
The thing that tends to drive the stock market during this period, during the fourth quarter of a midterm election year is believed to be is that you finally get some certainty.
There's a lot of anxiety about maybe the president's party losing a lot of seats, which is pretty typical.
But I think rather than also all the political calculations people look at, What if this Democrat House or Democrat Senate or whatever, or split government, you know, people, there's this kind of cliche that, you know, the split government is good because there's this gridlock and gridlock is good because then the government can't do anything.
That might not necessarily be the best explanation because the stock market tends to actually get quite nervous in the third quarter of a midterm election year.
And once the outcome more or less is known, then they get much more relaxed and it regains some of that.
I mean, the market is within spitting distance of an all-time high as we speak.
And what about sectors? Are there certain sectors that will do better in that kind of split, Congress, that you're talking about? Yeah.
If you look at who's elected president or what parties in power, people will make certain bets like Goldman Sachs or Bank of America or whoever.
All of a sudden, their research will come out with a Trump portfolio or this portfolio or that portfolio.
You look, though, at what sectors did well under, let's say, a certain president who was known to be friendly to Industry X, not friendly to Industry Y.
And it's very often the exact opposite, just in the way that people were nervous and now the market is kind of relaxing a bit.
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